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McDonald's Welcomes New Breakfast Competition

Chain will focus on freshness, consumer insights to stay ahead in the morning.

April 23, 2014, 03:56 pm

OAK BROOK, Ill. – McDonald's Corp. is taking new breakfast competition in stride. According to media reports, the fast-food giant denied it has been affected by "recent competitors" in the breakfast daypart during its earnings call for the 2014 first quarter. This remark comes after fellow fast-food chain Taco Bell launched its first breakfast program.

"It seems every year there's someone new who's making a run at breakfast, whether it's our closer competitors, sandwich shops or taco shops," stated McDonald's CEO Don Thompson. "We expect customers to try their breakfast, but we're confident in our ability to execute at breakfast and at being a restaurant that cooks that breakfast and understands the time needs of our consumers."

Thompson noted that new competitors in the breakfast market indirectly help McDonald's by bringing more attention to the daypart. "It forces us to focus even more on being aggressive relative to breakfast," he added.

The company's own recent coffee giveaway, which took place March 31 through April 14, was designed to support its breakfast food as much as its McCafé program.

McDonald's plans to focus on the freshness of its breakfast offerings as a way to differentiate itself from the competition. One reason customers choose McDonald's is because the food is cooked at its restaurants, not just microwaved, according to Thompson.

"Our breakfast is strong and continues to be a solid performer," the CEO said. "We want to make sure we focus on the strengths we have. … We've been in breakfast for 30 years and have become America's favorite place to eat breakfast, and we don't plan on giving that up."

During the earnings call, officials reported that McDonald's same-store sales declined 1.7 percent during its fiscal first quarter, with operating income falling 3 percent. The company attributed this to severe winter weather and "challenging industry dynamics."

Company leaders reiterated plans to improve the customer experience by focusing on consumer-driven changes and insights.